Attorneys General About To Go Poindexter on For-Profit Education

We suspect that the for-profit education industry will follow in the footsteps of the mortgage industry and lead to widespread defaults. It's actually a perfect industry to question the canard that the private sector excels at all things. The problem is that certain for-profit institutions primarily excel at getting their hands on federal funds, while not providing or insuring adequate educations. It's all bodies in the seats, or rather, money from the government for the bodies in the seats.

And while the University of Ubiquity (Phoenix) probably takes some care to really teach, it does so at a high cost to those who choose it, and the industry as a whole has a dreadful default rate out of proportion to the students served.

The for-profit higher education industry, which includes a vast swath of colleges ranging from the more than 400,000-student University of Phoenix to small mom-and-pop beauty schools, is facing intense scrutiny from the federal government due to growing federal student loan default rates at many schools. Although only about 10 percent of college students nationwide attend such for-profit institutions, the schools account for nearly half of all student loan defaults, leaving the government to pick up the tab.

(Huff Po)

The schools are attracting wider scrutiny now, with attorneys general across several states taking a harder look.

Given Wall Street's and off-Wall Street's (hedge funds) recent proclivities, we have to wonder if some industrious soul is not even now concocting an elaborate financial bet to coincide with either 1) the defunding of half these institutions or 2) the negative impact of legal consequence. Revenues should start taking a hit, eventually.

We've never been pleased with the democratization of education, nor the rising fascination with internet based education at the lower elementary and high school levels. Such indirect instruction defies human nature-specifically, the propensity of humans to seek the quickest path to reach a goal. We always delude ourselves that students will willingly seek out knowledge and not shortchange themselves by variations of the cheat, but in a competitive world, the temptation and lack of oversight is too much for many to resist.

It's all a house of students that will come tumbling down. There is no reason to assume that what students cannot learn in a physical setting with an instructor right in front of them will come easier with that instructor and classmates removed to the vague distance of a computer monitor. Nor is there reason to expect that everyone should have a degree, regardless of degree quality or degree price.